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Determine whether each of the following would increase or decrease

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Determine whether each of the following would increase or decrease the opportunity costs for stay-at-home moms or dads (those who choose not to accept work outside the home). Briefly explain your answers.

a. Higher unemployment rates.



b. Lower average wages.



c. Higher demand for labor.



d. Lower income tax rates on wages earned.
A)

Decrease opportunity costs, because the ability to work outside the home is less than that for someone who does not choose to work outside the home. It's less likely they would find work, anyways so it actually makes sense to not seek employment outside the home.

B)

Decrease opportunity costs. As average wages decrease, the amount of money a stay at home parent could earn outside the home would decrease.

C)

Increase opportunity costs. If there's a high demand for labor, then there's a better chance that if the stay at home parent tried to find work they would if there's a low demand for labor. Wages will also be higher during periods of high demand for labor.

D)

Increase opportunity costs. If lower income taxes are levied on wages earned, then that means the parent would have kept more money if they chose to earn a wage outside the home.

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